Critical Illness - Life Assurance

CRITICAL ILLNESSOnly Cover, below is a rough guide but it is not an exhaustive definition.

If you select not to receive advice on critical illness cover, we are not responsible for the appropriateness of the product that you might choose or the level of cover chosen and consequently you will not have recourse to the Financial Ombudsman Service. We can advise on Critical Illness cover and provide Assurance comparisons from a wide range of assurers.

Critical Illness Only Cover

With rapid medical advances the chances of surviving a major illness are greater than ever however the financial consequences of suffering a major life changing illness can be very substantial. The one-off payment from a critical illness policy is designed to help you cope with these costs which will typically include the need to adapt your home or car and / or undertake training for a different occupation.

"1 in 3 people in Britain will be diagnosed with cancer at some point in their life" (Source: Imperial Cancer Research Fund 1999).

A critical illness policy normally pays out a tax-free lump sum on the diagnosis of certain specified critical illness. Most policies will pay out following the diagnosis of heart disease, stroke, renal failure, cancer, paralysis, major organ transplant and coronary artery bypass surgery as well as a range of other conditions.

Over recent years the number of diseases covered by a typical critical illness policy has increased to more than 25. One normally has to survive 14 days after the diagnosis of a serious illness to ensure payment although there are exceptions for instance with Multiple Sclerosis which can take longer to confirm. Care should be taken when selecting a Critical Illness plan to ensure that you are covered for all the eventualities that you require as benefits do differ.

Once the plan has paid out it is normally terminated. If you continue to survive your illness and for instance the sum assured was to pay off your mortgage then you would have received the sum assured, cleared your mortgage and there is no requirement to pay back the money or indeed entitlement for a further payment to be received on future death.

Critical illness cover may be taken out on its own or included in one's life mortgage protection policy to remove one's mortgage payments from your affairs should one suffer such an illness. This is often a very cost effective method of having both covers. Should a combined plan be taken out then it will pay out on the first event of either critical illness or death.

If you already have a mortgage policy it may be advisable to have a separate 'stand alone' policy to make sure that in addition to one's mortgage being paid off one has enough money to cover the above other costs associated with having suffered a critical illness.

Be aware that many policies are reviewable. This means that if the overall claims experience of a company over their bank of policyholders, are greater than expected they can increase the premiums across the board to all policyholders. This means that companies can try to buy business with low premiums, only to increase them in later years. Because of this hazard the cheapest reviewable quote may not prove to be such good value as a guaranteed quote.

You can take out a policy on a single life, joint life first death or life of another basis.

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